Blog

We don't need 6 Californias, we need better regions

With reports that a tech entrepreneur's ballot initiative to split California into 6 separate states has gained enough signatures to qualify for the ballot, we need to set the parameters of what exactly is at stake. And, as a proud Californian, I feel particularly compelled to speak out against this plan. I know, it may have little chance of passing. But, then again, citizens have voted on crazier initiatives in the past, some of which have succeeded.

The proposal: six states (see below), as imagined by venture capitalist Timothy Draper: the Bay Area, which he calls: Silicon Valley, Jefferson (the redwood empire that has on its own talked of secession before), Sacramento and Napa Valley the Central Valley, West California (which would basically be LA plus Santa Barbara), and South California, which would be Orange County, Riverside, San Bernardino and San Diego counties.

Proponents argue that California's low rankings in education, healthcare and general political paralysis are because of the state's size. Therefore, according to their logic, what better way to solve these problems than to break it into a bunch of small, responsive local governments. Sounds great right? Except for the fact that it completely ignores the reality of almost every one of the problems the initiative supposedly is trying to solve.

Splitting a state, worsening the problem

Every major issue we face, as a state, a nation, and even as a world requires working across lines of jurisdiction because problems like climate change, pollution, creating jobs do not follow simple state boundaries. Its why separate pollution standards for states doesn't make sense: companies relocate to states with lower requirements, which they do, forcing states into a race to the bottom to attract capital at the expense of the environment and, of course, everyone else. So dividing up the world's 8th largest economy into 6 smaller pieces is not going to solve any of the big problems we face.

To understand much of California's current political paralysis and budget problems, which by the way have improved in the last few years under Governor Jerry Brown's leadership, we need to go back to Proposition 13. Passed in 1978 at the urging of anti-tax activist Howard Jarvis and his broad revolt of upper and middle class homeowners against property taxes, the bill limited the increase in property taxes to no more than 2% a year, and limited tax on homes to no more than 1% of the valuation. Also critically, reassessment of a home's value for tax purposes was only allowed if the house changed hands, something that greatly privileged existing home owners at the expense of new ones. It seemed like a boon to homeowners at the time, but over the last few decades this, as well as other measures, starved the state of funds. Real estate taxes, which make up a large source of funding for schools, as well as other public goods like libraries and parks, fell. This, in turn, forced local governments to rely more on the state for funding, and more on sales taxes. Cities turned increasingly to sales tax to make up lost revenue, zoning for big box retailers and strip malls.

Proposition 13, the supporters of which argued would curb big government, paradoxically ended up strengthening big state government at the expense of local governments. But this was directly the result of a policy that was advocated by anti-tax activists who wanted smaller, more accountable government, just as Draper advocates today. What they got was exactly the opposite.

The answer to improve funding for schools and other services is not to divide the state into smaller ones: this would undoubtedly privilege wealthier areas (like the San Francisco Bay Area) at the expense of other ones, just as Proposition 13 did. Regions with a lower tax base, like the Central Valley, would be even less well-off then they are now. And this is, ultimately, what a measure like this is designed to do: enclaves of economic prosperity (the Silicon Valley) desiring to opt out of the larger state and the duties that come with supporting less economically advanced areas of the state, much like gated communities have tried to do on a smaller scale. But no city, and no region even the prosperous Bay Area, is an island. The very existence of cities like San Francisco and especially Los Angeles was made possible by large aqueducts that brought water from the Sierras or the Central Valley. Yes its great that those innovative billionaires are creating jobs for the rest of us, but they wouldn't be able to even drink water or turn on their iPhones if it weren't for the rest of the state.

Not easy to divide: California's aqueducts

The state's other great public good, the University of California, is already in jeopardy due to decreased funding from the state. Dividing that into constituent parts is unlikely to help. Do we really think a state comprised only of the Central Valley would be able to fund a research university like UC Merced, or UC Davis? Again, tech investors like Draper may think their wealth materializes solely out of their own genius and hard work, but if it weren't for universities turning out graduates, we wouldn't have created the Silicon Valley in the first place.

Draper's proposal, however misguided it may be, does of course reflect some underlying truths: namely that as a state we haven't been able to make the kind of investments needed to maintain our leading edge as the world's most innovative region, including in education and transit infrastructure. The high speed rail project, which aims to foster a higher density smart-growth alternative to suburban sprawl in addition to its immediate reduction of Co2 from driving and flying, will be all but extinguished. Its already hard enough to get one state to agree on a major infrastructure project, hence the already massive delays. Now imagine 6 states arguing over that fact: say goodbye to high speed rail, and any other project that requires large-scale vision and thinking.

As it turns out, all of these issues require large-scale cooperation. But its not just about large-scale public works. It's interesting that, as a businessman, Draper would not be more sensitive to the dizzying increase in regulations and laws that companies would have to follow, especially companies that operate across the state. And imagine 6 DMVs, 6 Caltrans, 6 versions of every overworked and underfunded public agency that already exists. This would create more inefficiencies not less. I thought entrepreneurs were all about reducing inefficiency?

But, as it turns out, Draper is merely another tech entrepreneur who has come to ardently believe in that strand of libertarianism found among so many of his ilk. And he is no stranger to it either: he contributed his millions to a previous failed measure to pass school vouchers in 2001. It's the same set of beliefs that led to Proposition 13 in 1978, a measure that has created entrenched structural inequality and disfunction in California. We shouldn't let the same people fool us this time.

Strengthening regions: an alternative

Instead of dividing up the state, we should be talking about building regional governments within it. It is true that the San Francisco Bay Area (one of the states imagined in the proposal) is very much a distinct economic entity from say, northern California with its vast redwood forests. Regions, not cities, are the true building blocks of our urban economy. It's something that urbanists and economists are increasingly in agreement on. Draper's initial outline for states illogically splits the LA region right down the LA-Orange county line. For those of you who aren't familiar with Southern California geography, let me remind you that as a motorist you would not be able to tell that you've crossed from Orange County to Los Angeles County were it not for a big green sign as you zip down the 405 or 5 freeways. The urban sprawl of LA does not follow county boundaries, (see below) and it wouldn't follow state boundaries either.

The alternative to splitting states is to strengthen regional governance by fostering consolidation of cities, or at least, formally enshrining regional bodies of governance as government entities. Look at LA county, with its dizzying collection of 88 cities. Some of these, like Vernon, are almost totally devoid of residents. Vernon is mostly an industrial city, lying closer to downtown L.A. than many parts of L.A. proper. And yet, because it is a separate city tightly controlled by an industry-supporting city government, Vernon's factories have been able to spew toxic pollution at will, which it should go without saying does not follow city limits and in fact affects the entire LA region.

San Francisco, as a city, does not even contain a million residents (its 837,442, as of 2013). Yet as a region, the Bay Area has over 7 million people. As tech workers (and now tech companies) have migrated to the city itself from the less interesting and less urban San Jose area (the original silicon valley), property prices have risen dramatically in the city, forcing out old and young residents alike. Meanwhile, exclusionary zoning and other NIMBY laws hinder the construction of affordable housing in SF, as well as smaller cities in the Peninsula and San Jose. If the bay area was effectively one large city, problems like transportation and housing could be addressed on a much more comprehensive scale. Public, or affordable housing, could be developed around new transit centers in the peninsula, the East Bay, or even parts of central SF. New transportation between SF and San Jose could provide an alternative to the hated shuttles of tech firms.

Residents of affluent areas like Atherton or Palo Alto would, of course, object to such consolidation on grounds that their property taxes would go to help people of different skin colors and economic segments (lets be honest) than their own. But who cares? Local civic boundaries could still be retained as districts or neighborhoods, or even boroughs like in New York, and compromises could probably be worked out so that neighborhoods would retain some management over local affairs like parks, schools, and other things.

Most rapidly developing cities in Asia are organized on such a model, from Seoul, greater Tokyo, to China's megacities. Because Shanghai's city limits include virtually all of the metropolitan area considered to be part of the city, it can implement policies to improve the region's efficiency through transportation and other planning initiatives without having to cobble together the support of various cities and fiefdoms all holding on to their parochial interests.

Fight for California!

This is what people like Draper should be talking about: building more integrated regions within the state of California, not trying to create totally new states. This alternative essentially addresses many of the problems we see in California today but at a much more manageable policy scale. It's not going to require congressional approval to add 10 more Senators, a hurdle that makes the initiative look like an even bigger waste of time and money. It wouldn't lead to bureaucratic redundancy and chaos as we systematically dismantle one of the world's most productive regions, partitioning resources, people and economies in the process.

As a proud graduate of UC Berkeley, a symbol of the best of what California can be, I will simply end with this:

Our sturdy Golden Bear,
Is watching from the skies,
Looks down upon our colors fair,
And guards us from his lair.
Our banner Gold and Blue,
The symbol on it too,
Means FIGHT! for California.
For California through and through! *